Singapore Accounting Standards
Singapore accounting standards are prescribed by the Accounting Standards Council (“ASC”) through the power vested in them by the Accounting Standards Act. Although the ASC is responsible in formulating and circulating the accounting standards, they are not responsible for the monitoring and enforcing compliance with the standards. For companies, the enforcement is done by ACRA.
Singapore accounting standards are known as Financial–Reporting–Standards or commonly known as “FRS” that follow closely the International–Accounting–Standards and International–Financial–Reporting–Standards (“IFRS”) that is issued by International–Accounting Standards–Board (“IASB”).
Usually, the ASC will monitor the IFRSs and modified them to take into account the local business context. The ASC works closely with the following bodies or stakeholders:
- Accounting Standards Committee of the Institute of Certified Public Accountants of Singapore (“ICPAS”) in prescribing and reviewing new accounting standards
- Business sectors and various other stakeholders to obtain their views on the new standards before they are issued
- IASB to highlight local issues on IASBs projects by participating actively in standard setters meeting and providing relevant reviews and comments
- The other national accounting standard setters in region to review convergence of the standards
4-Stage FRS Adoption Process:To ensure the prescribed FRS is of high quality, the ASC adopts a rigorous process before adopting a new accounting standard. The 4-stage process is:
1. Exposure draft stage
Before a new accounting standard is prescribed or an existing standard is amended, exposure draft (“ED”) is first issued to the public for comments. When IASB issues an ED, the ASC will issue an equivalent ED. The equivalent ED is to invite public comments on the proposed equivalent FRS. These EDs are posted on both the ASC and ICPAS websites.
The ASC will send email alert to interested parties and tap on ICPAS list of interested parties which include academic association, listed companies, government bodies, banks and industry associations. The ASC will also hold public consultations to seek more feedback.
In order to allow for sufficient time to collate the comments, review them and draft comment letters to IASB, the deadline given by the ASC is usually a month before the deadline by IASB.
2. Comments review stage
Comments are reviewed by subcommittees set up by the Accounting Standards Committee of ICPAS. The subcommittee members consist of selected ICPAS members and representations from certain interested industries (for example, banking and insurance). These members will review the comments received and deliberate on the accounting issues affecting their industries. After deliberation, they will propose draft comments on the ED and present their recommendation to the Accounting Standards Committee of ICPAS.
3. Post exposure draft stage
After considering the recommendations and comments from the subcommittees, the Accounting Standards Committee of ICPAS will provide a summarized feedback and proposed comment letters to the ICPAS Council and the ASC.
Upon receipt of ICPAS proposed comments, the ASC will still seek further feedback from its own Committees before making a final decision to approve the proposed comment letter.
Once the comment letter is approved, the comments will be posted for public view and sent to IASB.
4. Issuance of standards
Before the final standard is issued by IASB, ASC and ICPAS will continue to monitor the development of the proposed standards in IASB.
Once the standard is issued by IASB, the Accounting Standards Committee of ICPAS and its relevant subcommittees will review the final standards. They will take into account changes from earlier proposed standards, issued during the ED period and its impact on relevant stakeholders before advising the ICPAS Council and the ASC whether to adopt the new standard in full or with modifications. The ASC will also seek feedback from its own Committees as well as advice form an independent technical consultant before making a final decision.
Once the final decision is made, ASC and ICPAS will work together to prepare the FRS to be issued in Singapore.